Both the lite and the full-featured editor for MOSS can insert images in a discussion board post. By default, the editor is configured to work with the libraries from the current site, so if you have a picture library, it will be available in the editor's image manager dialog. If the users have write permissions, they will be able to upload new images in the library and insert them in a post.
Discussion boards fall into the list scenario of the RadEditor for MOSS so any list settings you apply in the RadEditor will also be applied there.
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